Kate Mendenhall

The Tragedy of Fraud

By Harriet  Behar, Sweet Springs Farm, Gays Mills, Wisconsin. Harriet is an Organic Farmers Association Governing Council and Policy Committee member.

“Organic Integrity from Farm to Table- Consumers Trust the Organic Label” – Slogan used by the USDA’s National Organic Program

The organic market has enjoyed decades of growth, reaching $55 billion annually in U.S. sales in 2019. It is one of few labels that has a strong meaning and a system of federal oversight to provide a consistent definition from farmers markets to grocery store aisles across the country. However, trust in the label has been shaken by recent high-profile, mass-volume fraudulent sales with malicious intent—a tragedy for the both the farmers and consumers who have relied on the organic label for their livelihood and as an important choice of food and fiber for themselves and their families. Organic sales are booming, but unfortunately it seems, so is fraud.

It is no surprise that those willing to make a fast buck would seek to relabel conventional crops as organic, which fetch a higher price premium. Numerous cases of organic fraud have come to light in recent years, mostly centered on organic commodity crops like corn and soybeans, although produce and other sectors are not immune to phony organic products. Both domestic and imported grains have been found fraudulent. The scale and elaborate nature of the fraud over the past decade spans hundreds of truckloads, numerous large ocean-going vessels, and hundreds of millions of dollars.

The vast majority of organic farmers are not fraudulent and view their organic certification as an achievement. There are many organic certificates framed on the wall next to the family pictures of children, graduations and weddings. Organic farming typically relies on more management, planning, and labor than growing the same crops conventionally. Maintaining documentation on activities, inputs, and rotations is necessary under the law. Sharing this information with certifiers and inspectors adds an extra burden, somewhat compensated by the higher organic price received in the marketplace. Both anger and sadness are felt by the organic community when nonorganic products are scammed as organic. Real organic producers have experienced large economic losses due to their legitimate crops being replaced by questionable grain at cheaper prices. Many share the sentiment of Dave Campbell, longtime organic farmer from Illinois; "I have been positive about the organic marketplace for the many decades I have been growing organic corn and soybeans, but the recent fraudulent organic sales by both domestic and foreign operators has lowered my optimism."

Farmers and businesses had provided numerous tips to certifiers and to the National Organic Program (NOP) illustrating both domestic and import fraud activities. Did the tips lead the NOP to require enhanced oversight and subsequent enforcement actions against these operations? Why has it been so difficult for the National Organic Program and the USDA to find and stop this fraud? To many organic farmers, it does not appear the USDA has made protection of the organic label a top priority.

Fraud in the American Heartland

The scale of one recent (2019) case of domestic fraud is astonishing. According to the Department of Justice in the Northern District of Iowa, a well-respected man in his community, Randy Constant, admitted to $142,433,475 of “organic” grain sales, the vast majority of which were fraudulent. During the years of 2010 to 2017, he sold over 11,500,000 bushels of

grain (this volume is estimated to fill 3,600 rail cars or 14,375 semi-trailers), with more than 90% of it falsely marketed as organic.

How did this happen? David Glasgow, Associate Deputy Administrator of the National Organic Program, stated “people who commit this kind of fraud are of

ten well-known and trusted in their community. It is hard for good people to believe bad things about someone they know, which can allow the criminal activity to go unseen for years.”

Glasgow preferred not to share the various methods Constant used to gather and market his phony organic grains as he does not want to provide “a roadmap for future offenders.” Members of the organic community did submit complaints to the NOP about Constant over the years. There was at least one complaint against Constant submitted to the NOP from a competitor who was concerned by the volume of sales moving through Constant’s Ossian, Iowa-based brokerage, Jericho Solutions. His lower-than-standard prices gained him buyers, drove down prices, and stole sales from his legitimate organic competitors. Another complaint stated organic soybeans sold by Constant in 2007 were grown from genetically modified seed (prohibited in organic). Glasgow would not comment on these complaints stating that the USDA, like all government agencies, will not discuss actions on specific complaints until they have been settled. However, Glasgow did confirm the “NOP has worked with other enforcement agencies with international reach to develop tools that help us identify higher risk activities in the marketplace and rapidly increase surveillance, build the case, and take action.”

As a result of increasing pressure from the organic community, Congress, and these cases of fraud, Glasgow explained the USDA has strengthened “the partnership between the NOP and other law enforcement agencies including the USDA’s Office of the Inspector General,

Food Safety Inspection Service, and the Animal and Plant Inspection Service; as well as the Justice Department, Federal Trade Commission, and Customs and Border Protection.” These agencies have deeper resources for investigation and the ability to charge an individual with criminal activity, an authority the NOP does not have. The NOP fines for mislabeling a product as organic are not as strong as criminal penalties that can be brought by these other agencies. The NOP explained that, “fining someone who is facing prison time and multimillion-dollar asset forfeiture is a much steeper penalty than NOP’s authority to issue a civil penalty.” Furthermore, the NOP does not have the authority to “stop sale” of fraudulent products.

The U.S. justice system requires strong evidence to bring a case to criminal court. In the Constant case, even though there was covert surveillance of the illegal activities, until the government was able to get testimony of witnesses who were involved in the movement and false labeling of the organic grain, and they had a concrete false communication for a wire fraud charge, there was not a strong enough criminal case to bring Randy Constant to justice for his substantial crimes.

Sentencing

Three additional farmers from Overton, Nebraska were also found guilty in the Constant crime. They admitted in court that they produced nonorganic grain and knew that Constant planned to fraudulently sell it as organic. These farmers received over 10 million dollars from Constant for their collaboration. It seems these farmers rationalized the dishonest dealings by believing they were not the person actually selling the crops as organic, yet the court proved otherwise. During the sentencing, their attorney asked for leniency because no one was hurt. United States District Court Judge C.J. Williams felt differently, calling their activity “massive fraud, perpetrated on consumers over a long period of time” that “caused incalculable damage.”

The Nebraska farmers received sentences, from 3 to 24 months in prison, and Constant was sentenced to 10 years. All were given stiff fines totaling over $120 million. Three days after sentencing Constant committed suicide in his garage, bringing his case to a tragic end.

Organic Fraud from Abroad

This recent domestic fraud case comes on the heels of years of suspected international organic import fraud from ocean freighters carrying grain labeled as organic from high-risk foreign markets. Countries such as Ukraine, Kazakhstan, Moldova and the Russian Federation were identified by the European Union in early 2018 as high-risk areas for organic fraud and the E.U. limited imports from these countries. These shady businesses then focused on the lucrative U.S. organic market with less scrutiny at the border. In March 2018, a shipment of “organic” grain from these countries was found to be fraudulent and 25,000 metric tons of corn was refused entry into the U.S. However, this refusal was because it was whole seed and not cracked corn (only cracked corn is allowed from these countries,) rather than its organic status.

Even though the NOP issued a memo in July 2018 to organic certifiers to be wary of these high-risk countries for grain fraud, little was done at the border to ensure their grain was actually organic. “Although organic farmers were complaining to the USDA about suspected organic grain fraud from imports since 2015, it took a high-profile story in the Washington Post and a lot of pressure on Congress to get them to act, “said John Bobbe, former Executive Director of the Organic Farmers Agency for Relationship Marketing (OFARM). “Organic farmers need more protections from the National Organic Program.” The Strengthening Organic Enforcement Rule is one result of the action from Congress asking for more focus on this issue from the NOP.

Where do we go from here?

With pressure from the press and organic community, the NOP has responded with various efforts to improve their oversight of organic fraud. In 2018, they began facilitating a tighter working relationship with Customs and Border Protection (CBP). Since the NOP does not have any authority to control commerce at the border, the first step was educating CBP about organic. There were some easy improvements to make such as educating CBP employees about organic status. CBP also now knows to flag any incoming organic products that were fumigated with prohibited substances by APHIS at the border because of invasive pests. The CBP also knows to inform the NOP and prevent those commodities from being sold as organic.

The NOP has recognized that certifiers are on the front lines of protecting organic integrity. They are sharing their improved analytical tools that identify risky behavior with the certifiers and asking certifiers to implement more consistent complaint documentation and follow-through. The NOP has the authority to take away a certifier’s accreditation, yet even with some questionable certifier actions this tool has been used sparingly. Instead, certifiers are told to improve when they are doing poorly in the oversight of the organic label, but have been allowed to continue in the organic certification business.

Additionally, the NOP has improved their complaint review process and are now encouraging more complaints from producers and consumers to identify fraud using a form found at https://organic-compliance.ams.usda.gov/.

Strengthening Organic Enforcement: Improvements to the Organic Regulation

The USDA published a proposed rule, Strengthening Organic Enforcement, in the Federal Register (Docket #AMS-NOP-17-0065) on August 4, 2020 to deal with many necessary changes to more effectively protect and enforce organic integrity.

To deal with fraud, this rule proposes the U.S. implement an import certificate requirement, requiring the certifying agent to approve the specific import sale of an operator shipping a product into the U.S.  This would provide tighter oversight on the volumes being imported, by providing certifiers the info they need to track sales in real time, rather than just once a year at the inspection. The European Union has used this system for numerous years, which has proved to improve traceability and fraud detection.

The rule also requires organic inspectors and certification personnel to demonstrate the necessary knowledge and skill needed to perform their jobs through quantifiable requirements and ongoing continuing education. In addition, specific auditing activities will be required on every inspection to ensure the volumes of outgoing organic products match sufficient incoming organic products.

The rule will also require certifiers to share compliance-related information with other certifiers.  Certifiers will also be required to perform a percentage of unannounced inspections each year on operations considered “high risk.” High-risk spot inspections should shed light on suspicious activities and lessen the avenues for hiding illegal dealings.

The rule also proposes that all organic operations will have a uniform organic certificate generated through the NOP database to reduce inconsistencies, making it easier to understand if the operation has recently been certified, or is about to be reinspected for continued certification. Certifiers will be required to keep this publicly searchable database current, whereas they currently are only required to update it on an annual basis.

The NOP proposed rule appears to have included the suggestions both required by Congress and brought forward by many in the organic community. However, more needs to be done to boost the investigative and punitive capabilities of the NOP. The system within the NOP to scrutinize complaints and bring cheaters to justice must become more robust, with the capability to stop the sale and commerce of fraudulent products. The deterrent to criminal behavior relies not only in tight oversight from certifiers and inspectors, but also requires the quick hand of enforcement by government. The great majority of U.S. organic farmers are doing an excellent job and uphold the integrity we all depend on for a successful organic market. It is very frustrating to see the integrity of the label damaged by bad actors and a lack of enforcement. While the NOP is implementing some improvements, they continue to be under-resourced and try to implement 20^th century tools for oversight of the 21^st century organic supply chain. We must all continue to work to demand more protections of organic products from fraud. The National Organic Program must do better to live up to their slogan, “Organic Integrity from Farm to Table- Consumers Trust the Organic Label.”

About the Author:  Harriet Behar farms organically on Sweet Springs Farm in Gays Mills, Wisconsin, producing bedding plants, fresh and dried herbs, vegetables, grains, eggs and honey. Harriet serves on the Organic Farmers Association Governing Council and Policy Committee and has been involved with federal, state and local policy advocacy for over 30 years. Harriet has worked as an educator with MOSES, the International Organic Inspectors Association and the University of Wisconsin. She is an active member of the National Organic Coalition, Wisconsin Organic Advisory Council, and most recently served as Chair of the National Organic Standards Board. She has been an organic inspector since 1992 and has visited more than 2200 organic farms and processing facilities around the world.

This article was written for New Farm Magazine, the magazine of the Organic Farmers Association.  All OFA Members receive a complimentary issue of New Farm annually.  Join Today!

by Kate Mendenhall

ORGANIC FARMS ADAPTING FOR COVID-19

Flexibility, Diversity & Direct-to-Consumer Sales Winning Strategies

By, Noah Cohen, Organic Farmers Association Intern

Despite uncertainty at the start of the coronavirus outbreak in early 2020—as restaurants, schools, and other institutions shuttered to a close—many organic farms have been bright spots of the COVID-19 economy. Nearly every organic category has seen year-over-year sales gains since March, and, with the pandemic radically reshaping consumer behavior, that growth could continue. Steve Lutz, senior VP of strategic insights firm Category Partners, says consumers are prioritizing immune health more than ever before,  and expects this newfound focus to have a “lasting impact” on their spending habits. Meanwhile, safety-conscious consumers are more wary about who is touching their food, driving direct-to-consumer sales such as CSAs. Even while COVID-19 has presented many challenges, these shifting consumer priorities have created new opportunities for farmers—particularly organic farmers, who can market themselves as a healthy choice, and has benefited farmers that can sell direct-to-consumer or had diverse markets already established.

Here’s how a handful of organic farmers from around the country have fared:

DAVE BISHOP, PRAIRIERTH FARM, ATLANTA, IL

• FARM FACTS: PrairiErth Farm is a 480-acre multigenerational, diversified farm that sells “a bit of everything” through various channels throughout central Illinois and Chicago.
• EXPERIENCE: Bishop calls 2020 “interesting times, but good times as far as our business.” While their restaurant sales rapidly contracted, PrairiErth has more than compensated by expanding its typically 150-member CSA to 300, with 100 more now on the waiting list. PrairiErth grows some feed crops like corn, but they feed it to their own livestock or sell to local rather than commercial feed mills, sparing them reliance on the now-deeply disrupted “commodity crop structure.”
• TAKEAWAYS: Bishop credits PrairiErth’s resilience to its “diversified” crop selection, customer base, and marketing. “Diversity is not only critical in regenerative production systems, but in marketing systems. Grow lots of things and sell them in lots of places,” he recommends. Bishop particularly observes many other meat farmers who work with commercial processors struggling with processing chain disruptions. “What do you do with a 280-lb hog that’s soon going to be a 400-lb hog [because there’s no big processors open]?” he asks. “I mean, this puts you in a horrible position… that highlights very clearly that if something goes wrong, the whole (industrial food) system has no way to adapt.” Finally, he says, “nobody overrules the consumer, so that’s where the power lies… we’re on the road to developing a more resilient, local food system, and we—the public—need to support it by how we spend our food dollars.”

DAVE CHAPMAN, LONG WIND FARM, EAST THETFORD, VT

• FARM FACTS: Long Wind Farm has grown soil-based organic greenhouse tomatoes, which they sell wholesale to supermarkets, since 1984.
• EXPERIENCE: Chapman says Long Wind Farm was so well-poised to meet the COVID-era marketplace that no marketing changes were necessary. “The main thing we’ve had to do,” he jokes, “is learn how to say ‘I’m sorry,’ because we just can’t fill the [increasing] orders.” One challenge was finding enough workers to meet this surging demand. While some employees stayed home—especially the first month—Chapman managed to pay high-risk workers to stay home and give people “combat pay” for coming to work, with the help of the PPP. Chapman, one of the first wave of farmers to apply for a PPP loan, says he received it unusually quickly because he “worked with a local bank that was very committed to the process.”
• TAKEAWAYS: “Surviving as a business is always a moving target,” Chapman says, which makes adaptability key. However, he thinks his existing business model is uniquely well-suited for current conditions: “We sell into the wholesale market as a small regional producer, and we’re big enough that the stores like dealing with us.” While Long Wind Farm easily found enough seasonal workers for harvest season, Chapman has seen many farms that typically rely on immigrant labor—particularly H2A workers—having much more difficulty due to border closures. “It’s a pretty gripping commentary,” Chapman observes, “that a lot of [American agriculture] doesn’t work without a labor force that, by and large, doesn’t have a path to citizenship, that’s treated as second—or third—class citizens, and that doesn’t have legal protections, including the right to come to work.”

LAURA FREEMAN, MT FOLLY FARM, WINCHESTER, KY

• FARM FACTS: Mt. Folly Farm sells organic grains, hemp, pastured beef, chicken, and pork with “a local, shortened supply chain.”
• EXPERIENCE: “The biggest challenge we had was shutting down our farm-to-table restaurant” mid-March due to COVID restrictions, Freeman says. Immediately, she recouped by turning the restaurant into a “farm grocery store” for her farm-to-table market products. “We took out all the tables, put in coolers, and started selling beef and early spring crops.” Unlike many of her beef-farming neighbors, Freeman has “gone local,” which she says has made her relatively immune to processing chain disruptions. “We have a small USDA beef and lamb packer who is open, though now absolutely swamped,” she explains.
• TAKEAWAYS: Freeman says going local has helped her “pivot” to meet COVID-era realities by “creating a food system we can watch and manage safely.” “We are small and committed, with a great team spirit,” she adds. Further buoying Mt. Folly, like many local organic farms, was its permanent staff of 25 employees, who “became cross-trained on all sorts of projects… from salesmen and saleswomen helping the distiller, to chefs working in the garden.”

KEN KIMES, NEW NATIVES FARM, SANTA CRUZ, CA

• FARM FACTS: Kimes is co-owner of New Natives Farm, a microgreens, sprout and mushroom farm that sells through several channels including farmers markets and health food stores.
• EXPERIENCE: “It was hard to understand at first what we should do around all of this,” says Kimes, who initially lost roughly 30% of his business when Silicon Valley tech campuses shut down, decimating his wholesale food service demand. Nonetheless, due to its relatively self-sufficient production process—they pack their own greens, for instance—New Natives has mostly weathered the COVID storm, and, with the help of the Paycheck Protection Program (PPP), has retained its entire workforce. Kimes says it was “relatively straightforward” to apply for the PPP loan, but recommends applying to more than one bank, “having a good set of accounting books on hand,” and trying to get the loan from a local bank.
• TAKEAWAYS: Kimes’ recommendations can be summed up by two words: “be nimble.” “An important thing,” he explains, “is that we sell to a lot of different channels,” many of which now demand rigorous food safety regimens to which New Natives had to adapt. “The more you can just embrace the new opportunities,” Kimes concludes, “the better it’s going to work out.”

MARK MCAFEE, ORGANIC PASTURES DAIRY, FRESNO, CA

• FARM FACTS: Organic Pastures Dairy milks 714 pasture-grazed cows on 400 acres and produces its own line of raw dairy products, including milk, cheese, butter, cream, and kefir which they sell to 1300 grocery stores nationwide.
• EXPERIENCE: McAfee says Organic Pastures Dairy has “never had better sales or more enthusiasm.” He credits this success to consumers’ focus on immune system health, driving many to try raw milk for its probiotic richness. “That’s what’s driving our markets, because people don’t want to be a statistic in the ICU.” Because Organic Pastures processes its own raw milk, they have not been vulnerable to the conventional processing facility closures that have become commonplace due to the loss of food service market. Instead, they bottle their own milk, package it under their own brand, then deliver it to stores on their own trucks. This direct connection, McAfee says, enabled them to pivot when they realized, come late February, that their demand would outstrip supply. “We adapted literally within a day, and sometimes we would deliver our products to stores and they would say, ‘just put all of your products on all the entire shelf, and don’t worry about anybody else, because they're not coming for another two weeks. And as a result, we picked up a lot of new customers.”
• TAKEAWAYS: McAfee says the most important factor to COVID-era success is “a consumer connection.” “When you truly listen to consumers and adapt to respond to them, you’re winning. But if you’re not connected to them, how would you know how to respond? So social platforms, an email address, a 1-800 number… are very important.”

JUDITH REDMOND, FULL BELLY FARM, GUINDA, CA

• FARM FACTS: Redmond is a co-owner of Full Belly Farm, a 360-acre northern California organic farm that produces vegetables, herbs, nuts, flowers, and fruit, which they sell both wholesale and retail.
• EXPERIENCE: “The challenge was to reinvent the way we farmed, marketed, did farmers markets, harvested vegetables—everything,” Redmond says. “It was hard for us to cover all the demands for communication from the public. We also had to deal with the mental health side of things—many of our employees were very frightened to continue work. We had to make sure our employees understood that the shelter-in-place still applied to them as soon as they got home… it was very challenging, with many uncertainties.” Despite these challenges, Full Belly Farm has thrived, especially its CSA, which by July had over 2000 people on its waiting list.
• TAKEAWAYS: Redmond credits Full Belly Farm’s resilience to its “diverse marketing structure, with CSA, farmers markets, stores and wholesale outlets.” “When our restaurant and food-service business ended, we were able to fill-in elsewhere,” she explains. “We already have an on-line presence, so people could find us and order CSA boxes using our on-line interface.”

WHERE DO WE GO FROM HERE?

Most organic farmers seem to agree on one thing: that COVID-19 has exposed fundamental flaws in the food system status quo. Mark McAfee calls the pandemic “a national stress test on our food system [where] consolidated, huge industrial systems have failed” while local, organic, consumer-connected systems have thrived. While COVID-19 has been tragic, Bishop says, it has unexpectedly provided “a once-in-a-lifetime opportunity” to reevaluate our current food system and imagine how it might improve for the future, using the resilience and success of the many thriving local, organic farms as a blueprint.

Several farmers also recommended specific policy priorities, including:

• Enforcement of antitrust laws to combat meat/dairy industry concentration, which many have called “the root cause” of COVID-related processing supply chain disruptions
• Fixing the organic livestock enforcement loophole, which has tanked organic dairy prices
• Mitigating the farm workforce’s vulnerability to border closures by introducing a new longer-term farm worker visa for immigrants and an agriculture-centric path to citizenship
• Prioritizing local farms + disproportionately impacted communities when distributing stimulus money
• Making federal investments into organic sector development
• Revising eligibility restrictions for SNAP, creating incentives to buy fresh, local foods

This article was written for New Farm Magazine, the magazine of the Organic Farmers Association.  All OFA Members receive a complimentary issue of New Farm annually.  Join Today!

by Kate Mendenhall

July Policy Update

By Patty Lovera, Policy Director

After months of normal procedures being stalled because of the disruption caused by COVID-19, some of the policy machinery started to come back to life this month. There’s a lot going on, with continued work to respond to the increasing pandemic, the fight to improve the organic standards, and a report from a special committee in Congress about climate change.

PANDEMIC RESPONSE

The USDA and Small Business Administration are still running several programs for agriculture that were created by the CARES Act in late March. You can see more details about the SBA programs, called the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) here. In early July, Congress passed and the President signed a bill to extend the time frame for applying to the PPP program until early August (the original bill expired June 30.)

The USDA continues to run two programs created by the CARES Act – the Farmers to Families Food Box (contracts to ship boxes of food to food banks) and the Coronavirus Food Assistance Program(CFAP) (direct payments to farmers for eligible commodities).

The USDA started a second round of contracts for the Farmers to Families Food Box, with most of the vendors that got a contract in the first round being renewed for the second round, but not all. There are some reports that USDA may initiate a third round of contracts later this month, so if you are interested in this program, keep an eye on their website.

For the direct payment (CFAP) program, you can get more information here, including which crops are eligible for direct payments (based on USDA’s assessment of whether they suffered a significant price drop between January and April.)  Last week, USDA announced additional fruits and vegetables that are now eligible for direct payments to producers. The USDA recorded a series of webinars about this program, which might be useful if you are considering whether to apply.

In addition to these existing programs, Congress is expected to pass another bill this summer to address the ongoing impacts of the pandemic. The House already passed their bill in May, called the HEROES Act, which would continue the approach from the CARES Act of providing funding for USDA to make payments to producers, as well as some additional funding for things like protective equipment. The Senate will develop their own version of a bill. The Senate is on recess until the last week of July, and it looks as if the discussions on their bill will start in earnest when they return to DC. Now that this process seems to finally be underway, we are reminding Senate offices about the needs of organic farmers, in hopes they will include these in their version of the bill.

APPROPRIATIONS: Funding for Organic Programs

After months of delay because of the pandemic, there are some signs that Congress is starting to turn back to their standard agenda, specifically the annual process of passing the “appropriations” bills that provide funding for federal agencies like the USDA. Last week, the House Appropriations committee adopted its version of the spending bill for USDA. It would provide increased funding for the National Organic Program ($18 million, up from $16 million this year) and continue funding levels for organic transition research and other programs OFA and our allies have supported. The next steps in this process are a vote by the full House, and the Senate still has to write a bill and pass it through committee before going to the full Senate. The next fiscal year for the federal government starts on October 1^st, so this process will speed up (or raise the prospect of a government shutdown) in September.

IMPROVING ORGANIC STANDARDS

After many months of delay, there is finally some good news on one of the rules we need to improve the integrity of the organic standards. The National Organic Program last week released the text of long-awaited proposed rule on Strengthening Organic Enforcement! This proposed rule will implement the provisions of the 2018 Farm Bill on preventing fraud in the organic supply chain and ensuring that U.S. organic farms can compete on a level playing field.

You can read the text of the proposed rule and view a webinar by the NOP here. OFA is analyzing the details of the proposed rule and will be back in touch soon with how you can submit a public comment.

Unfortunately, another critical rule on organic integrity, Origin of Livestock (OOL), is still stuck in the process at USDA. In June, USDA missed a deadline set by Congress for finishing the long-delayed rule to close loopholes in the standards for how livestock are transitioned into organic. OFA and 70 other organizations wrote to Congress (and alerted the media) that the deadline passed with no rule from USDA. Keep reading to find out how you can urge Congress to make sure USDA finishes this critical rule.

HOUSE SELECT COMMITTEE ON THE CLIMATE CRISIS

This month, the House Select Committee on the Climate Crisis released their report, “Solving The Climate Crisis: The Congressional Action Plan for a Clean Energy Economy and a Healthy and Just America.”  The report covers a lot of topics, including agriculture, and makes recommendations for what the House and Senate Agriculture Committees could do to make agriculture adapt to and help address climate change, including a specific recommendation to increase support for organic farming and tightening organic standards (see page 347 of the report.)

TAKE ACTION:  Level the Playing Field for Organic Dairy Farmers!

In June, the USDA’s National Organic Program missed a deadline set by Congress to finalize a long-overdue rule to improve the standards for how livestock are transitioned into organic (the “origin of livestock” rule.)  We need your help to tell Congress to put pressure on USDA to get this done!

Right now, the best way to reach your members of Congress is via email. Look up your Representative at www.house.gov (use the “Find Your Representative” box at the top right and then go to your member’s website and look for a Contact tab) and your two Senators at www.senate.gov (go to the “Senators” tab and then “Contact” to find the Senators from your state.)

Here’s an example email for you to use.  Add details about your farm (especially if you are a dairy farmer) if you would like:

Dear Senator/Representative:

I am your constituent and I urge you to act now to ensure that the USDA closes loopholes in the organic standards that are hurting organic dairy farmers. The USDA’s National Organic Program missed the deadline set by Congress in the FY 2020 appropriations bill to finalize a rule on how animals are transitioned into organic production.

We desperately need this rule to close loopholes in the organic regulations that are being exploited by large-scale dairy operations that continuously cycle animals in and out of organic production. This rule is long overdue, and it is necessary for consistent enforcement to create a level playing field for all organic dairy producers. USDA’s failure to tighten these standards has allowed some large operations to unfairly flood the market with organic milk, hurting smaller farmers and endangering consumers’ trust in the organic label.

Congress required USDA to complete the OOL final rule by June 17, 2020.  This deadline has now passed, and we need you to make sure that USDA finishes this rule as soon as possible.

Sincerely,

<<Your Name, Farm Name (if applicable)>>

by Kate Mendenhall

Small Biz Admin Stimulus Updates - PPP & EIDL

June 20, 2020

The Small Business Administration recently announced updates to their programs to assist small businesses with the COVID-19 pandemic.

Paycheck Protection Program (PPP)

The deadline to apply for the PPP is June 30^th.

When this program was originally announced earlier this spring, the condition for the loan to be forgiven (the loan essentially becomes a grant) was that a business would have to keep everyone on their payroll or re-hire laid off staff within 8 weeks. That deadline has now been extended to 24 weeks from the date of the loan being approved, or by December 31, 2020, whichever comes first. You can read more about the PPP on our website here or click here to get information from the SBA.

Economic Injury Disaster Loan (EIDL)

High demand had slowed down the process of getting applications to the EIDL program approved, and at one point, only agricultural business applications could submit new applications. As of June 15, the SBA is accepting new EIDL applications from all eligible small businesses and U.S. agricultural businesses. EIDL applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis. To learn more about eligibility and apply, click here and read the description on our website.

by Kate Mendenhall

USDA misses Origin of Livestock Deadline: OFA sends letter to Congress

June 18, 2020

Dear Senator/Representative,

In the FY 2020 appropriations bill, Congress gave the U.S. Department of Agriculture’s National Organic Program (NOP) 180 days to finalize a long-delayed rule that will level the playing field for organic dairy farmers. The NOP has now missed this deadline. We urge you to ensure that the agency complies with the law and finalizes the Origin of Livestock rule as soon as possible.

The rule is critical for creating a level playing field for all organic dairy producers and will safeguard the integrity of the organic label. Because the current standard is inhibiting the NOP’s ability to provide consistent and fair enforcement, the organic community has worked for many years to close loopholes for how livestock are transitioned to organic production. The Origin of Livestock rule will close the loopholes by specifying that organic dairy animals must be raised organically from the last third of gestation or be raised organically for one year if transitioning a conventional herd to organic, which is allowed only once. Cycling dairy animals in and out of organic production must be prohibited, and once a distinct herd is transitioned to organic, all animals must be raised organically from the last third of gestation.

The organic label is one of the most highly trusted labels for consumers. This is due to the strong standards and enforcement behind the label. But failing to close loopholes in the standards that allow practices that do not meet consumers’ expectations puts consumer trust in the label at risk. The delay in issuing a final rule has resulted in economic harm for organic dairy farmers from low pay prices caused by an oversupply of organic milk that is enabled by loopholes in the current rule. Because the need to strengthen the standards for organic livestock is so clearly causing harm, when the NOP accepted public comments on this rule in 2015, the vast majority of the original comments supported making these changes.

Congress recognized the need to strengthen the standards and included language in the FY 2020 Agriculture, Rural Development, Food and Drug Administration and Related Agency Appropriations bill requiring the NOP to issue a final Origin of Livestock rule within 180 days from the date of enactment. But that deadline has now passed, and the NOP has not yet finalized the rule.

Organic dairy farmers are suffering and continued delays in implementing this rule will prolong the dire economics facing organic dairy farmers, as well as jeopardize consumers’ trust in the organic label. It is past time for the NOP to finalize the rule and provide much-needed clarity requested by the organic community. We urge you to make sure that the NOP complies with Congress’ mandate and finalizes the origin of organic livestock rule as soon as possible.

Sincerely,

Organic Farmers Association
National Organic Coalition
Beretta Dairy
California Certified Organic Farmers
Carolina Farm Stewardship Association
Center for Environmental Health
Community Alliance with Family Farmers
Cuatro Puertas
FairShare CSA Coalition
Farm Aid
Food & Water Action
Food Animal Concerns Trust (FACT)
Food Democracy Now!
FoodChain ID
Friends of the Earth
Global Organic Alliance, Inc.
Hanover Co-op Food Stores of NH & VT
Hoosier Organic Marketing Education
iEat Green, LLC
Illinois Stewardship Alliance
International Organic Inspectors Association
Iowa Organic Association
Kanalani Ohana Farm
Lady Moon Farms
Land Stewardship Project
Maine Farmland Trust
Maine Organic Farmers and Gardeners Association
Mensonides LLC. Providence farms.
Midwest Organic and Sustainable Education Services (MOSES)
Montana Organic Association
MOSA Certified Organic
National Family Farm Coalition
National Farmers Organization
National Farmers Union
Natural Grocers
Natural Resources Defense Council
Northeast Organic Dairy Producers Alliance
Northeast Organic Farming Association -- New York (NOFA-NY)
Northeast Organic Farming Association of New Hampshire (NOFA-NH)
Northeast Organic Farming Association of Vermont
Northeast Organic Farming Association- Interstate Council
Northeast Organic Farming Association – Massachusetts
Northern Plains Sustainable Agriculture Society
Northwest Center for Alternatives to Pesticides
Ohio Ecological Food and Farm Association
OneCert, Inc.
Oregon Tilth
Organic Advocacy
Organic Consumers Association
Organic Farmers Agency for Relationship Marketing (OFARM)
Organic Seed Alliance
Organic Seed Growers and Trade Association
Organic Trade Association
OrganicEye
Pasa Sustainable Agriculture
PCC Community Markets
Pennsylvania Certified Organic (PCO)
Provender Alliance
Raw Milk Institute
Rural Vermont
Sammons Custom Farming
Slow Food Western Slope
Socially Responsible Agricultural Project
Sonoma County Farm Bureau
Straus Family Creamery
The Cornucopia Institute
Valley Organic Growers Association
Virginia Association for Biological Farming
Western Organic Dairy Producers Alliance
Wild Farm Alliance

by Kate Mendenhall

National Organic Organizations Pressure FSA to Act on Cost Share

June 5, 2020

Richard Fordyce

Administrator
Farm Service Agency
U.S. Department of Agriculture
Washington, D.C.

Dear Administrator Fordyce:

Like other farmers and food businesses, organic farmers and businesses are also struggling economically as a result of the coronavirus pandemic. As you work to implement the Coronavirus Food Assistance Program, we know that Farm Service Agency (FSA) personnel are stretched very thin in their efforts to respond to the pandemic. However, we are very concerned about the delay in FSA’s publication of the notice of funds availability (NOFA) for the two organic certification cost share programs for fiscal year 2020, one of agency’s core assistance programs for organic operations.

Funding for OCCSP is provided through two authorizations: (1) National Organic Certification Cost Share Program (National OCCSP) funds and (2) Agricultural Management Assistance (AMA) funds. Section 10105 of the Agricultural Improvement Act of 2018 (2018 Farm Bill, Pub. L. 115–334) amended section 10606(d) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 6523(d)), to authorize $2 million from CCC to be used for National OCCSP funds for each of FYs 2019 and 2020, $4 million for FY 2021, and $8 million for each of FYs 2022 and 2023, to remain available until expended. In addition, carryover federal funding from previous fiscal years was set aside to be used to fund OCCSP activities in 2019 and later years, until fully expended.

Last year, the FSA NOFA for the two Organic Certification Cost Share Programs was published in the Federal Register on April 29, 2019 to announce the availability of the OCCSP funding for Fiscal Year 2019.

https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/organic-certification-cost-share-program/pdf/occsp_nofa_2019-08624.pdf

Even with that NOFA publication date, the OCCSP funding for fiscal year 2019 was delayed relative to previous years.  As a result, we are very concerned that the significant delay in the FY 2020 NOFA for OCCSP activities will result in further delays in certification cost share reimbursements for certified organic operations who are struggling due to pandemic-related disruptions in their operations.

Therefore, we are requesting that a Notice of Funds Availability for Organic Certification Cost Share Program operations be published immediately.

Thank you for your consideration of this request.

Sincerely,

National Organic Coalition
National Farmers Union
National Sustainable Agriculture Coalition
Organic Farmers Association
Organic Farming Research Foundation
Organic Trade Association

by Kate Mendenhall

JUNE POLICY UPDATE

By: Patty Lovera, Policy Director

PANDEMIC RESPONSE

Congress passed the CARES Act in late March, which provides money that farms can access from two parts of the federal government, the USDA and the Small Business Administration (SBA).

Small Business Administration

You can see more details about the SBA programs, called the Paycheck Protection Program and the Economic Injury Disaster Loan here. Last week, Congress passed and the President signed a bill to extend the time frame for re-hiring employees to convert the PPP loan to a grant and change some other requirements for the program. When the SBA releases the details on the new changes to the program, we will update the website.

CARES Act

The USDA is now operating its two main programs created by the CARES Act – the Farmers to Families Food Box (contracts to ship boxes of food to food banks) and the Coronavirus Food Assistance Program (CFAP) (direct payments to farmers for eligible commodities).

The USDA has released the details for its new program to buy farm commodities for distribution to food banks. The deadline for the first round of contracts was May 8th, but you can check out the USDA’s website for the deadline for the next round of contracts.

You can get more information about the CFAP direct payments program here, including information on how to submit a comment to USDA to ask for additional commodities to be added to the list of those eligible for payments (due June 22). The USDA is holding a series of webinars in early June for farmers, which might be useful if you are considering whether to apply to this program.

New Stimulus Bill

In addition to USDA putting the programs from the CARES Act into effect, Congress is expected to eventually pass some new legislation to deal with the ongoing economic impacts of the pandemic. The House passed a bill in mid-May called the HEROES Act, which would continue the approach from the CARES Act of providing funding for USDA to make payments to producers, as well as some additional funding for things like protective equipment. It is not clear yet when the Senate will start its process on developing a new bill, but it is clear that they will write their own proposal and not build off of the HEROES Act passed by the House.
OFA has been sharing specific ideas on the needs of organic farmers with members of Congress to make the case for programs that will work better for diversified organic farms, especially focusing on the Senate.

Share Your Stimulus Stories With Us (So we can make improvements)

One thing that helps us communicate with members of Congress as we try to influence the next pandemic response bill is stories about how the existing programs are working (or if they aren’t working.) Let us know if you have participated in either the USDA programs (food purchases or direct payments) or the Small Business Administration programs (Paycheck Protection Program or the Economic Injury Disaster Loan.) Good or bad, tell us how your experience with the programs has been so we can relay this information to the people designing the next round of response.

TAKE ACTION FOR ORGANIC INTEGRITY

Even though there are lots of other things dominating the news, and the attention of lawmakers, we still need to remind our elected officials and the USDA that there is immediate work to do to ensure the integrity of the organic label. The USDA is past its deadline for a new proposed rule to prevent fraud in organic supply chains (the “Strengthening Organic Enforcement” rule required by the 2018 Farm Bill), but we are hopeful that proposal will be moving through the approval process soon and will be letting you know when the public comment period on this important issue opens up.

We need to remind Congress that USDA is perilously close to missing a deadline that Congress set, for finishing a long overdue rule to increase the standards for how livestock are transitioned into organic (the “Origin of Livestock” rule.)

Email Congress

Right now, the best way to reach your members of Congress is likely to be email, since many congressional offices have shifted their staffs to working remotely. You can find contact information for your Representative at www.house.gov (use the “Find Your Representative” box at the top right and then go to your member’s website and look for a Contact tab) and your two Senators at www.senate.gov (go to the “Senators” tab and then “Contact” to find the Senators from your state.)

What to Say

Tell you members of Congress that they need to make sure USDA finishes the final rule on Origin of Livestock (OOL.) This rule is desperately needed to close loopholes in the organic standards related to the transitioning of conventional dairy cows into organic dairy operations. Through the Fiscal Year 2020 appropriations process, Congress mandated that USDA complete the OOL final rule by June 17, 2020. This deadline is fast approaching and we need Congress to make sure that USDA finishes this rule as soon as possible. Will your member call the NOP and ask them to meet the June 17 deadline?

Report Back

Email Patty@organicfarmerassociation.org if you received a positive response.

by Kate Mendenhall

ACTION ALERT

Take Action for Organic Integrity!

Even though there are lots of other things dominating the news, and the attention of lawmakers, we still need to remind our elected officials and the USDA that there is immediate work to do to ensure the integrity of the organic label. The USDA is past its deadline for a new proposed rule to prevent fraud in organic supply chains (the “Strengthening Organic Enforcement” rule required by the 2018 Farm Bill), but we are hopeful that proposal will be moving through the approval process soon and will be letting you know when the public comment period on this important issue opens up.

But we also need to remind Congress that USDA is perilously close to missing a deadline set by Congress for finishing a long-overdue rule to increase the standards for how livestock are transitioned into organic (the “origin of livestock” rule.)

Email Congress

Right now, the best way to reach your members of Congress is likely to be email, since many congressional offices have shifted their staffs to working remotely. You can find contact information for your Representative at www.house.gov (use the “Find Your Representative” box at the top right and then go to your member’s website and look for a Contact tab) and your two Senators at www.senate.gov (go to the “Senators” tab and then “Contact” to find the Senators from your state.)

Here’s what you can tell them in your email.  Add details about your farm (especially if you are a dairy farmer) if you would like.

Example Email

Dear Senator/Representative:

I am your constituent and I urge you to act now to ensure that the USDA closes loopholes in the organic standards that are hurting organic dairy farmers. The USDA’s National Organic Program is about to miss a deadline set by Congress in the FY 2020 appropriations bill to finalize a rule on how animals are transitioned into organic production.

We desperately need this rule to close loopholes in the organic regulations that are being exploited by large-scale dairy operations that continuously cycle animals in and out of organic production. This rule is long overdue and it is necessary for consistent enforcement to create a level playing field for all organic dairy producers. USDA’s failure to tighten these standards has allowed some large operations to unfairly flood the market with organic milk, hurting smaller farmers and endangering consumers’ trust in the organic label.

Congress required USDA to complete the OOL final rule by June 17, 2020.  This deadline is fast approaching and we need you to make sure that USDA finishes this rule as soon as possible.

Sincerely,

<<Your name & contact information>>

by Kate Mendenhall

USDA Announces Plan for Farm Payments for Coronavirus

This week, the USDA announced details on how it will distribute $16 billion in direct payments to farms impacted by the COVID-19 pandemic and public health response. The funding for these payments came from the CARES Act that Congress passed in late March, as well as the Commodity Credit Corporation, a USDA-run financial institution that funds many farm programs and commodity purchasing programs.  The details for the payments are available on USDA’s website for Coronavirus Food Assistance Program.

ELIGIBLE CROPS

USDA has determined that these crops suffered at least a 5% price decline or loss due to significant market disruptions from the pandemic from January through April 2020.

• Non-specialty Crops malting barley, canola, corn, upland cotton, millet, oats, soybeans, sorghum, sunflowers, durum wheat, and hard red spring wheat
• Wool
• Livestock: cattle, hogs, and sheep (lambs and yearlings only)
• Dairy
• Specialty Crops
  • Fruits: apples, avocados, blueberries, cantaloupe, grapefruit, kiwifruit, lemons, oranges, papaya, peaches, pears, raspberries, strawberries, tangerines, tomatoes, watermelons
  • Vegetables: artichokes, asparagus, broccoli, cabbage, carrots, cauliflower, celery, sweet corn, cucumbers, eggplant, garlic, iceberg lettuce, romaine lettuce, dry onions, green onions, peppers, potatoes, rhubarb, spinach, squash, sweet potatoes, taro
  • Nuts: almonds, pecans, walnuts
  • Other: beans, mushrooms

PAYMENT RATES

USDA has set up different payment rates for each eligible crop. The rates are listed on the program website. (Note: the charts with the payment rates show two columns that split the payment by the source of funding, but the payment should be based on combining the two columns.) USDA is planning to pay 80% of the payment rate in this round of funding, and making the final 20% payment later in the year if funding is still available.

ELIGIBLE PRODUCERS

Producers must have an average adjusted gross income of less than $900,000 for tax years 2016, 2017, and 2018. If 75% of adjusted gross income comes from farming, ranching, or forestry, the limit of $900,000 does not apply.

Producers and legal entities also must:

• Meet the conservation compliance provisions;
• if a foreign person, provides land, capital, and a substantial amount of active personal labor to the farming operation; and
• not have a controlled substance violation.

PAYMENT LIMIT

USDA has set a $250,000 maximum payment per individual/operation. Corporate entities with multiple shareholders may be able to collect up to three $250,000 payments.

CROPS NOT ELIGIBLE FOR PAYMENTS

The USDA listed some specific crops that are not eligible for payments, including sheep more than two years old, eggs/layers, soft red winter wheat, hard red winter wheat, white wheat, rice, flax, rye, peanuts, feed barley, Extra Long Staple (ELS) cotton, alfalfa, forage crops, hemp, and tobacco.

There is a comment period open until June 21^st to request that USDA add more crops that will be eligible for payments. The request would need to demonstrate the price loss due to disruption from the pandemic. Details found here.

HOW TO APPLY

The Farm Service Agency is the USDA division that will handle applications for these direct payments. They will start accepting applications on Tuesday, May 26, 2020.

The USDA is advising people to schedule an appointment now to talk to FSA. You can find your local FSA office on the USDA’s website (bottom of the page).

If you are already in the FSA system, some of the information you will need to apply for these payments should already be on file (farm number, adjusted gross income information, etc.) If you have not worked with the FSA system before, take a look at the list of information they will need from you to get started on the website.

The USDA has also posted a short video on what the direct payment application will look like.

by Kate Mendenhall